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Corporate ownership structure and performance in Europe

Grant, Jeremy and Kirchmaier, Thomas (2004) Corporate ownership structure and performance in Europe. CEPDP, 631. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 0753017571

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Abstract

In this paper, we show that ownership structures vary considerably across Europe, and that the dominant form of ownership is not necessarily the most efficient one. These findings are in contradiction to similar research based on US samples. The results also demonstrate that firms without a dominant shareholder tend to outperform their country peer groups. We base our analysis on a new and unique dataset of uniform ownership data of the largest 100 firms in the five major European economies. We quantify the differences in ownership by comparing three distinct ownership structures of firms and relating them to performance. For the first time we employ a Hodrick-Prescott Filter, a methodology widely used in macroeconomics to isolate the trend growth components from cyclical fluctuations, to estimate the share price trend of each firm. We take this trend as a good indirect indicator of the quality of governance.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2004 the authors
Library of Congress subject classification: H Social Sciences > HG Finance
Journal of Economic Literature Classification System: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Sets: Research centres and groups > Managerial Economics and Strategy Group
Research centres and groups > Financial Markets Group (FMG)
Collections > Economists Online
Collections > LSE Financial Markets Group (FMG) Working Papers
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 631
Date Deposited: 25 Jul 2008 10:59
URL: http://eprints.lse.ac.uk/19960/

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